TurboTax Fraud

The lawyers at Morgan & Morgan have filed a class action lawsuit on
behalf of people who’ve had fraudulent tax returns filed under their
names through the tax preparation software TurboTax. The suit claims
that Intuit, the maker of TurboTax, facilitated fraudulent tax filings
and identity theft because it failed to implement security measures that
would have better protected users’ most personal and sensitive
information. It has also been alleged that when employees found that
millions of TurboTax accounts were being used for filing fraudulent
returns, company management forbade the workers from flagging or turning
off the accounts.

The lawsuit claims that TurboTax customers – as well as individuals who
never used the software – had fraudulent returns filed in their names
and continue to be at an increased risk for identity theft. You may be
able to participate in this lawsuit if you:

Received a bill from TurboTax even though you never used the software

Had someone file a fraudulent tax return through TurboTax using your
name

Were double billed by TurboTax, with one charge stemming from a
fraudulent filing

If any of these happened to you, get in touch with
us today to learn more about this class action
suit and why you may be entitled to compensation.

What’s the Lawsuit Saying?

This allegedly gave cybercriminals easier access to data including residential addresses, birth dates, Social Security numbers, bank account numbers and other financial information that helped facilitate the filing of thousands of fraudulent tax returns.

Intuit Didn’t Properly Protect Customers’ Sensitive Information

The lawsuit alleges that Intuit knew or should have known about the
recent increase in fraudulent tax filings and data breaches, but failed
to take “commercially reasonable measures” to protect customers’
information. This allegedly gave cybercriminals easier access to data
including residential addresses, birth dates, Social Security numbers,
bank account numbers and other financial information that helped
facilitate the filing of thousands of fraudulent tax returns.

Intuit also allowed fraudsters to create fake TurboTax accounts to file
fraudulent returns in third-party, non-customer names, according to the
class action. When Intuit employees identified a number of TurboTax
accounts that they thought were being used solely for fraudulent tax
filings, the company allegedly told them not to flag or deactivate the
accounts.

Intuit Facilitated the Filing of Fraudulent Tax Returns on TurboTax

The lawsuit claims that companies such as Intuit must be diligent in
recognizing fraud and abuse, reporting it to the International Revenue
Service (IRS) and working to prevent fraud while safeguarding
information that could be used to file fraudulent returns; however,
Intuit’s lax security measures did not meet these standards and actually
facilitated tax fraud on TurboTax, according to the suit. This allegedly
allowed thousands of fraudulent tax returns to be filed.

While security experts told Intuit that the company should add certain
safety measures to protect TurboTax customers, the company did not
implement these “very basic security measures” until years later,
according to the suit. Specifically, the class action claims that Intuit
should have added a two-step verification process to TurboTax, where
users logging into their accounts would be prompted to further verify
their identities by email or phone; however, Intuit waited until
February 2015 to add two-step verification to TurboTax and only did so
after states reported suspicious tax filings from the software and the
company had to temporarily suspend state e-filing operations.

Intuit Put Thousands at Risk for Further Identity Theft

One plaintiff named in the lawsuit, Christine Diaz, alleges that she
purchased Intuit’s TurboTax software to do her taxes in 2011, but hasn’t
used the program again since. Yet, in January 2015, Diaz was notified
that federal and state tax returns were filed under her name using the
software and later received a bill for more than $200 for these
fraudulent returns, according to the lawsuit. As a result of these
fraudulent filings, the lawsuit claims that Diaz is now ineligible for
online tax filing, is at an increased risk for future identity theft and
must pay for ongoing credit monitoring.

Another plaintiff, Michelle Fugatt, alleges that she never used TurboTax
to do her taxes, but was notified in March 2015 that someone had filed a
tax return under her name using the software. In addition to being at an
increased risk for identity theft, the plaintiff alleges that she may
also lose eligibility for certain government programs because the
fraudulent tax return was filed for a much higher income.

Who Is Covered By the Class Action?

All consumers and businesses in the United States who were victims of
fraudulent tax returns filed in their names through TurboTax.

All consumers and businesses in the United States who provided their
data to Intuit through TurboTax and had their information accessed by
unauthorized persons.

If your information was compromised after using TurboTax or if you
didn’t use TurboTax to do your taxes but were still billed for these
services, contact us today. You may be able to
take part in this class action lawsuit and recover compensation for any
losses you sustained from having a fraudulent tax return filed under
your name or having your identity stolen.

Two of Intuit’s former security employees have also filed a separate
whistleblower lawsuit that alleges the company made millions by
knowingly processing state and federal tax returns filed by
cybercriminals.

One of the former employees claims that Intuit refused to adopt ideas
that would have helped quickly identify fraudulent accounts, as well as
“basic cyber security policies” that would have made it more difficult
for thieves to use TurboTax for fraudulent tax filings. For instance,
the lawsuit claims that Intuit could have blocked the re-use of the same
Social Security number across a number of TurboTax accounts or prevented
an account from filing multiple returns.

Furthermore, the whistleblower lawsuit claims that Intuit systematically
prioritized profits over ethics when it came to the processing of
tax filings. According to the former employees, Intuit previously
claimed to be at the forefront of reporting suspected cases of tax fraud
to the IRS; however, the company allegedly scaled back its reports to
the government when it noticed that cybercriminals were taking their tax
fraud business to TurboTax’s competitors, causing a decrease in revenue.
As a result, the company allegedly stopped or delayed sending the IRS
its fraud numbers, which resulted in both an increase in fraud and an
increase in revenue for the company.